The court dismissed a petition filed by the Kerala Bar Association that had argued that the move was discriminatory to smaller establishments.

The Supreme Court on Tuesday upheld the Kerala government’s new liquor policy, which allows only five-star hotels to sell alcohol in the state. The policy had envisioned that while people could still buy liquor and consume it at home, smaller hotels would not have the permission to sell it.

The Kerala Bar Hotel Association had contended that the new policy was discriminatory to such hotels. The government had argued that those who would lose business from the new policy were not fundamentally entitled to the right to sell alcohol.

The policy had earlier been upheld by the Kerala High Court on March 31, with the bench saying that drinking at a bar was a luxury. The policy has been politically significant as the Supreme Court’s verdict could set a precedent for the Bihar government’s plan to ban liquor in its own state.

The liquor policy issue had also indirectly led to the ouster of Kerala finance minister KM Mani, who was accused of accepting bribes to reopen the bars that were shut down because of the government’s move. The Supreme Court’s decision on Tuesday will also be a boost for the United Democratic Front and chief minister Oomen Chandy, with the state elections scheduled for 2016.

Stocks of liquor companies like United Breweries, United Spirits, Empee Distilleries, Tilaknagar Industries and Pincon Spirit were trading in red following the ruling, reportedThe Financial Express.